Wednesday, June 22, 2005

Lennar Reports Record Earnings

Lennar blew everyone away by beating estimates by $0.14. Lennar earned $1.42 in Q3 up 16% year over year. They raised their earnings estimates for 2005 to $7.80 pershare. I get a $78 stock price by January 2006 ($7.80 X 10 (Homebuilders Average Earnings Multiple) = $78). Lennar is still undervalued and will likely earn $9.00 a share in 2006 ($90 by Jan 2007). I still think a conservative price target for this year is between $70-75. At least 20% upside left. Still a lot can happen between now and 2007. Also note that Lennar is a land bank, as they are selling lots of land and cleaning their balance sheet. Listen to the conference call for more details.
I am currently long Lennar.


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